Tag: Overtime

  • Overtime Rule Challenged in Federal Court – CUPA-HR

    Overtime Rule Challenged in Federal Court – CUPA-HR

    by CUPA-HR | May 23, 2024

    On May 23, a group of 13 local and national associations and Texas businesses filed suit in federal court in Texas, challenging the U.S. Department of Labor’s rule setting new minimum salary thresholds for the white collar overtime pay exemptions under the Fair Labor Standards Act (FLSA).

    The final rule of April 23, 2024 increases the minimum salary threshold to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. The rule also implements automatic updates to the threshold that will occur every three years. The suit claims that the salary threshold that goes into effect on January 1, 2025, is so high it will result in more than 4 million individuals being denied exempt status, even though these individuals could be reasonably classified as exempt based on their duties, and in doing so, the rule violates both the statutory language of the FLSA and prior court decisions. The suit also challenges the automatic updates.

    The following are plaintiffs in the case: Plano Chamber of Commerce, American Hotel and Lodging Association, Associated Builders and Contractors, International Franchise Association, National Association of Convenience Stores, National Association of Home Builders, National Association of Wholesaler-Distributors, National Federation of Independent Business, National Retail Federation, Restaurant Law Center, Texas Restaurant Association, Cooper General Contractors and Dase Blinds.

    CUPA-HR will be following the case closely and provide you with regular updates.



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  • DOL Increases Overtime Minimum Salary Threshold to $58,656 in Final Rule, Implements Automatic Updates – CUPA-HR

    DOL Increases Overtime Minimum Salary Threshold to $58,656 in Final Rule, Implements Automatic Updates – CUPA-HR

    by CUPA-HR | April 23, 2024

    On April 23, the Department of Labor (DOL) issued the highly anticipated final rule to alter the overtime pay regulations under the Fair Labor Standards Act (FLSA). The rule increases the minimum salary threshold to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. The rule also implements automatic updates to the threshold that will occur every three years. Institutions will need to make all necessary adjustments by July 1, 2024, in order to be in compliance with the final rule.

    The department clarified that the first increase updates the minimum salary threshold using the department’s current methodology, which was used in the 2019 Trump-era overtime rulemaking to set the current standard of $35,568. The second increase then implements the department’s new preferred methodology, which sets the minimum salary threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest wage census region. This phased-in implementation will likely impact how litigation challenging the rule is both pursued and decided over the next six months.

    In September 2023, DOL issued its proposed rule to update the minimum salary threshold, which sought to increase the threshold from its current level of $35,568 annually to $60,209 — a nearly 70% increase. The proposed rule also sought to implement triennial automatic updates based on the 35th percentile.

    CUPA-HR submitted comments in response to the proposed rule and participated in a meeting with DOL and officials from the White House Office of Information and Regulatory Affairs (OIRA) to express our concerns with the proposal. In both the comments and OIRA meeting, CUPA-HR made the four following recommendations for DOL to consider before issuing their final rule:

    1. DOL should not update the salary threshold at this time.
    2. DOL should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    Lawsuits challenging the final rule are forthcoming. In the meantime, CUPA-HR will be hosting a webinar on May 8 covering the provisions of the final rule and its impact on higher education. Registration is open and free to all.



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  • White House Approves DOL Overtime Rule – Rule Release Imminent – CUPA-HR

    White House Approves DOL Overtime Rule – Rule Release Imminent – CUPA-HR

    by CUPA-HR | April 11, 2024

    On April 11, 2024, the White House Office of Information and Regulatory Affairs (OIRA) announced it had concluded review of the U.S. Department of Labor’s (DOL) final overtime pay rule. The rule is expected to increase the minimum salary threshold for the executive, administrative and professional (EAP or white collar) employee exemptions to overtime pay requirements under the Fair Labor Standards Act (FLSA) regulations. OIRA review is the final step in the regulatory process, and we expect DOL will release the final rule any day now. We will send another alert as soon as the final rule is released.

    On April 4, 2024, CUPA-HR’s president and CEO, government relations team and board members met with officials from DOL and OIRA to express our concerns with the September 2023 proposed rule. The proposal sought to increase the threshold from its current level of $35,568 annually to $60,209 — a nearly 70% increase. DOL also proposed increasing the salary threshold automatically every three years to the 35th percentile of weekly earnings of full-time salaried workers. Finally, DOL proposed that all employers would need to implement these changes within 60 days of the final rule’s release.

    During our OIRA meeting, CUPA-HR reiterated the concerns that were addressed in our comments submitted in November 2023. The comments made the following four recommendations for DOL to consider prior to issuing a final rule:

    1. DOL should not update the salary threshold at this time.
    2. If DOL implements an increase, it should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    We expect lawsuits challenging the final rule are forthcoming. CUPA-HR will keep members apprised of all updates related to the overtime regulations. Once the new regulations are released, we will plan and share registration information for a webinar. We will also provide an update for members who attend the spring conference in Minneapolis next week.



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  • CUPA-HR Participates in OIRA Meeting on FLSA Overtime Rule – CUPA-HR

    CUPA-HR Participates in OIRA Meeting on FLSA Overtime Rule – CUPA-HR

    by CUPA-HR | April 9, 2024

    On April 4, CUPA-HR’s government relations team, President and CEO Andy Brantley, and four national board members met with officials at the Department of Labor (DOL) and the Office of Information and Regulatory Affairs (OIRA) to discuss the upcoming overtime regulations to increase the minimum salary threshold. During the call, the group expressed CUPA-HR’s broad concerns with the rule, as well as the specific challenges implementation of the new rule could create for different types of institutions in various areas of the country.

    On March 1, DOL sent the final rule to update the Fair Labor Standards Act overtime regulations to OIRA for review. As previously noted, the OIRA review marks one of the last steps required before DOL can publish the final rule for public viewing. While the rule is at OIRA, the text and details of the final rule are not public, but interested stakeholders are able to request meetings with the administrator to discuss the proposed changes.

    During the meeting, Andy Brantley and Bailey Graves from the CUPA-HR government relations team reiterated the concerns that were addressed in CUPA-HR’s comments submitted in November 2023. The comments made the following four recommendations for DOL to consider prior to issuing a final rule:

    1. DOL should not update the salary threshold at this time.
    2. DOL should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    Brantley and Graves were joined by CUPA-HR Board Chair Jami Painter, Chair-Elect Robyn Salvo, and board members El pagnier Hudson and Kristi Yowell, who discussed the impact of these potential changes on employee exempt/nonexempt status and employee morale and benefits. They also discussed the impact of the rule on higher education’s efforts to offer competitive wages to employees, the difficulties of having employees in areas with different costs of living, and the impact this rule could have on an institution’s ability to provide student services.

    Looking Forward

    It is unknown when the final rule will clear OIRA review and be published for public viewing. OIRA review typically lasts 30-60 days, and OIRA meetings are currently set through April 11. However, the Biden administration has incentive to move quickly to publish the final rule in order to avoid the rule being overturned via legislation if Republicans win Congress and the White House in the November election.

    The final rule will also likely face legal action once it is published, which could delay the effective date or stop the rule from going into effect in its entirety. CUPA-HR will keep members apprised of when the final rule clears OIRA review and is published, as well as any legal challenges that may arise.



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  • Department of Labor Sends Overtime Rule to OIRA for Review – CUPA-HR

    Department of Labor Sends Overtime Rule to OIRA for Review – CUPA-HR

    by CUPA-HR | March 4, 2024

    On March 1, the Department of Labor (DOL)’s Wage and Hour Division (WHD) sent the highly anticipated final rule to update Fair Labor Standards Act (FLSA) overtime regulations to the Office of Information and Regulatory Affairs (OIRA) for review. This is a required step in the regulatory process and acts as one of the last steps prior to releasing the text of the regulation to the public.

    OIRA, as part of the president’s Office of Management and Budget, is required to review all proposed and final rules, as well as all regulatory actions, before implementation. While OIRA has 90 days to conduct its review, in most cases, the review takes 30 to 60 days. This means the final rule could be released as early as the end of March or in April, which would meet WHD’s April 2024 target date for release as indicated in the Fall 2023 Regulatory Agenda.

    WHD issued the proposed rule to increase the minimum salary threshold under the FLSA overtime regulations in September 2023. In the proposed rule, WHD sought to increase the salary threshold from its current level of $35,568 annually to $60,209 — a nearly 70% increase.* The proposed rule also sought to implement automatic updates to the salary threshold that would occur every three years and would tie the updated salary threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage census region. Notably, the proposed rule did not include any changes to the duties requirements of the FLSA overtime regulations.

    Comments in response to the proposed rule were due in November 2023. WHD received over 33,000 comments in response to the proposed rule. CUPA-HR, joined by 49 other higher education associations, submitted comments, which made the following recommendations:

    1. DOL should not update the salary threshold at this time.
    2. DOL should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    The text of the final rule is not public until the rule is published in the Federal Register, so details of the finalized salary threshold and the timeframe for compliance are unknown at this time. While the rule is at OIRA, however, interested stakeholders can request a meeting with the administrator to discuss the proposed changes. CUPA-HR will request a meeting with OIRA to discuss our concerns with the proposed rule.

    CUPA-HR will continue to keep members apprised of all updates as it relates to the FLSA overtime final rule.

     

    * The discrepancy between our figure of $60,209 and the DOL’s preamble figure of $55,068 arises from DOL’s own projections based on anticipated wage growth. The DOL’s proposed rule is rooted in 2022 data (yielding the $55,068 figure), but a footnote in the Notice of Proposed Rulemaking confirms that the salary threshold will definitely change by the time the final rule is issued to reflect the most recent data. Our comments, aiming to respond to the most probable salary threshold at the time a final rule is released, reference the DOL’s projected figure for Q1 2024, which is $60,209. We do not believe DOL will be able to issue a final rule before Q1 2024, so we are incorporating this projected figure into our response to the NPRM. In essence, our goal is to provide members with a clearer picture of the likely salary figure when the final rule comes into play.



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  • Overtime and Title IX Final Rules Targeted for Early 2024 Release in Fall Regulatory Agenda – CUPA-HR

    Overtime and Title IX Final Rules Targeted for Early 2024 Release in Fall Regulatory Agenda – CUPA-HR

    by CUPA-HR | December 12, 2023

    On December 6, the Biden administration released the Fall 2023 Unified Agenda of Regulatory and Deregulatory Actions, providing the public with an update on the regulatory and deregulatory activities under development across approximately 67 federal departments, agencies and commissions. This release is the second and final regulatory agenda for 2023, and it sets target dates for upcoming regulatory actions mainly for the first half of 2024.

    CUPA-HR has highlighted the following items from the Fall 2023 Regulatory Agenda for members to be aware of as we enter the new year. As a reminder, these target dates are not a guarantee, but they provide insight into when we can possibly expect the regulations to be published. CUPA-HR’s government relations team will continue to monitor for any updates on the following regulations and others that may impact the higher education space.

    Department of Labor

    Wage and Hour Division — Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees

    According to the Fall 2023 Regulatory Agenda, the Department of Labor (DOL)’s Wage and Hour Division (WHD) has targeted April 2024 for release of the final rule to update the Fair Labor Standards Act’s overtime pay regulations. The final rule seeks to increase the minimum salary threshold required for white-collar professionals to maintain exempt status under the FLSA.

    On September 8, WHD released a Notice of Proposed Rulemaking (NPRM) to update the salary threshold. The NPRM increases the minimum salary threshold from its current level of $35,568 per year ($684 per week) to $60,209 annually ($1,158 per week), which amounts to a nearly 70% increase.* Additionally, WHD proposes to automatically increase the salary level every three years by tying the threshold to the 35th percentile of full-time salaried wages in the lowest wage census region. DOL indicated in the proposed rule that it is considering implementing an effective date in the final rule that could come as soon as 60 days after the final rule is published to the public.

    CUPA-HR was joined by 49 other higher education associations in submitting comments in response to the NPRM. In our comments, we raised concerns with the timing of this increase, the size of the proposed increase, the implementation of automatic updates, and the timeline for regulatory compliance that WHD anticipates. Our comments were informed by a CUPA-HR member survey, in which over 300 members provided feedback on their concerns with and thoughts about the proposal. For ongoing updates, visit CUPA-HR’s FLSA Overtime page.

    Wage and Hour Division — Employee or Independent Contractor Classification under the Fair Labor Standards Act

    The Fall 2023 Regulatory Agenda indicates that WHD anticipated releasing the FLSA independent contractor rule in November 2023. The final rule has been at the White House Office of Information and Regulatory Affairs (OIRA) for review since September 28, 2023, and once the agency finishes its review, the rule will be published.

    On October 13, 2022, the DOL published an NPRM to rescind the current method for determining independent contractor status under the FLSA. The current test, finalized by the Trump administration in 2021, has two core factors of control and investment with three additional factors (integration, skill and permanency) that are relevant only if those core factors are in disagreement. The Biden rule proposes a return to a “totality-of-the-circumstances analysis” of multiple factors in an economic reality test, including the following six factors, which are equally weighted with no core provisions:

    • The extent to which the work is integral to the employer’s business.
    • The worker’s opportunity for profit or loss depending on managerial skill.
    • The investments made by the worker and the employer.
    • The worker’s use of skill and initiative.
    • The permanency of the work relationship.
    • The degree of control exercised or retained by the employer.

    Employment and Training Administration — Revising Schedule A to Include Updating Occupations in Science, Technology, Engineering, and Mathematics (STEM)

    The regulatory agenda indicates that DOL’s Employment and Training Administration (ETA) aimed to issue a Request for Information (RFI) in November 2023. According to the notice in the agenda, ETA is seeking input from the public “on whether Schedule A serves as an effective tool for addressing current labor shortages, and how the Department may create a timely, coherent and transparent methodology for identifying STEM occupations that are experiencing labor shortages in keeping with its requirements under the Immigration and Nationality Act … to ensure the employment of foreign nationals does not displace U.S. workers or adversely affect their wages and working conditions.”

    The RFI was sent to OIRA for review before publication on November 11, 2023, and will likely be released to the public soon.

    Equal Employment Opportunity Commission

    Regulations to Implement the Pregnant Workers Fairness Act

    In December 2023, the Equal Employment Opportunity Commission (EEOC) plans to issue a final rule to implement the Pregnant Workers Fairness Act (PWFA). The rule will create a framework for the EEOC on how to enforce protections granted to pregnant workers under the PWFA. For a detailed analysis of the proposed rule on implementing the PWFA, please see CUPA-HR’s blog post.

    In December 2022, the PWFA was signed into law through the Consolidated Appropriations Act of 2023. The law establishes employer obligations to provide reasonable accommodations to pregnant employees so long as such accommodations do not cause an undue hardship on the business, and makes it unlawful to take adverse action against a qualified employee requesting or using such reasonable accommodations. The requirements of the law apply only to businesses with 15 or more employees.

    Unlike the other regulations with target dates, the PWFA final rule has a statutory deadline for publication, which is December 29, 2023. Given this upcoming deadline, we will likely see the EEOC publish this rule soon.

    Department of Education

    Office for Civil Rights — Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance

    According to the regulatory agenda, the Department of Education (ED) anticipates releasing the highly anticipated Title IX final rule in March 2024. The rulemaking would finalize the June 2022 NPRM to roll back and replace the Trump administration’s 2020 regulations while simultaneously expanding protections against sex-based discrimination to cover sexual orientation, gender identity, and pregnancy or related conditions.

    CUPA-HR filed comments in September 2022 in response to the NPRM. In our comments, we brought attention to the possible impact the proposed regulations could have on how higher education institutions address employment discrimination.

    The new March target deadline marks the third time ED has delayed the issuance of the Title IX final rule. The rule was originally targeted for release in May 2023, but ED subsequently pushed the target date back to October 2023 via a blog post, when it became clear that the department would not meet the May timeline. Since ED missed the October timeline, they have faced increased pressure from Congressional Democrats and other advocacy groups to publish the final rule as soon as possible. While it’s not a guarantee ED will be able to publish the final rule in March 2024, the increased pressure will certainly motivate the department to move quickly.

    CUPA-HR plans to hold a webinar to inform members of the final rule’s new requirements once the final rule has been published. Details to come.

    Office for Civil Rights — Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance: Sex-Related Eligibility Criteria for Male and Female Athletic Teams

    Similar to the Title IX final rule above, ED plans to issue a final rule on student eligibility in athletic programs under Title IX in March 2024. The rule would finalize the NPRM that was released by the department in April 2023.

    Under the NPRM, schools that receive federal funding would not be permitted to adopt or apply a “one-size-fits-all” ban on transgender students participating on teams consistent with their gender identity. Instead, the proposal allows schools the flexibility to develop team eligibility criteria that serve important educational objectives, such as fairness in competition and preventing sports-related injuries. The department further explains that the eligibility criteria must take into account the sport, level of competition, and grade or education level of students participating, and the criteria would have to minimize harm to students whose opportunity to participate on a team consistent with their gender identity would be limited or denied.

    The NPRM received over 150,000 comments addressing support for and concerns with the proposal. ED must review all comments before issuing a final rule to implement these regulations, which is the likely cause of delay for both this rulemaking and the broader Title IX final rule.

    Department of Homeland Security

    U.S. Citizenship and Immigration Services — Modernizing H-1B Requirements and Oversight and Providing Flexibility in the F-1 Program

    On October 23, the Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS) issued a proposed rule that aims to improve the H-1B program by simplifying the application process, increasing the program’s efficiency, offering more advantages and flexibilities to both petitioners and beneficiaries, and strengthening the program’s integrity measures.

    Prompted by challenges with the H-1B visa lottery, USCIS has prioritized a proposed rule to address the system’s integrity. The proposed rule is aimed at strengthening the lottery registration process and preventing fraud, and it makes critical revisions to underlying H-1B regulations. For a detailed summary of what the H-1B proposal includes, see CUPA-HR’s blog post.

    The NPRM is open for public comment until December 22, 2023. The Fall 2023 Regulatory Agenda included the regulations, but it did not provide a timeline for issuing the final rule, likely because the comment period is still open for the NPRM.

    U.S. Citizenship and Immigration Services — Fee Schedule and Changes to Certain Other Immigration Benefit Request Requirements

    In April 2024, USCIS anticipates issuing a final rule to adjust the fees charged by the agency for immigration and naturalization benefit requests.

    USCIS published an NPRM on this issue in January 2023. The comprehensive proposal has implications for both employment-based and family-based filings, but certain provisions would have significant impacts for higher education employers. Specifically, the proposed rule includes a provision to fund the Asylum Program with employer petition fees, which would be a $600 fee paid by any employers who file either a Form I-129, Petition for a Nonimmigrant Worker, or Form I-140, Immigrant Petition for Alien Worker. Additionally, the proposed rule seeks to increase almost all employment-based and employment-based “adjacent” filing fees. For more information on the details of this proposed rule, see CUPA-HR’s blog post.

    On March 13, 2023, CUPA-HR joined the American Council on Education’s comments in response to the NPRM. The comments address higher ed-specific concerns with the proposal to increase fees for immigration and naturalization benefit requests, including concerns about the impact the increased fees will have on international scholars and institutions’ ability to hire nonimmigrant workers, including H-1B workers.

    U.S. Citizenship and Immigration Services — Petition for Immigrant Worker Reforms

    The regulatory agenda shows that USCIS plans to issue an NPRM in August 2024 that will “amend its regulations governing employment-based immigrant petitions in the first, second and third preference classifications.” According to the posting, the proposed rule would “codify current policy guidance and implement administrative decisions regarding successorship-in-interest and ability to pay; update provisions governing extraordinary ability and outstanding professors and researchers; modernize outdated provisions for individuals of extraordinary ability and outstanding professors and researchers; … implement reforms to ensure the integrity of the I-140 program; and correct errors and omissions.”

    U.S. Citizenship and Immigration Services — Modernizing Regulations Governing Nonimmigrant Workers

    In October 2024, USCIS plans to issue an NPRM to update employment authorization rules for dependent spouses of certain nonimmigrants and to increase flexibilities for nonimmigrant workers. CUPA-HR plans to monitor for any updates to this rule as it may apply to H-1B or other relevant nonimmigrant visas used by institutions.

    Department of State

    Pilot Program to Resume Renewal of H-1B Nonimmigrant Visas in the United States for Certain Qualified Noncitizens

    In February 2024, the Department of State plans to begin a pilot program to “resume domestic visa renewal for qualified H-1B nonimmigrant visa applicants who meet certain requirements.” The department will issue a notice in the Federal Register that will describe pilot program participation requirements and will provide “information on how those falling within the bounds of the pilot program may apply for domestic visa renewal.” The pilot program has been at OIRA since October 17, meaning the pilot notice could be published sooner than anticipated.

    * The discrepancy between our figure of $60,209 and the DOL’s preamble figure of $55,068 arises from DOL’s own projections based on anticipated wage growth. The DOL’s proposed rule is rooted in 2022 data (yielding the $55,068 figure), but a footnote in the NPRM confirms that the salary threshold will definitely change by the time the final rule is issued to reflect the most recent data. Our comments, aiming to respond to the most probable salary threshold at the time a final rule is released, references the DOL’s projected figure for Q1 2024, which is $60,209. We do not believe DOL will be able to issue a final rule before Q1 2024, so we are incorporating this projected figure into our response to the NPRM. In essence, our goal is to provide members with a clearer picture of the likely salary figure when the final rule comes into play.



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  • CUPA-HR Submits Comments in Response to DOL’s Overtime Rulemaking – CUPA-HR

    CUPA-HR Submits Comments in Response to DOL’s Overtime Rulemaking – CUPA-HR

    by CUPA-HR | November 8, 2023

    On November 7, CUPA-HR, joined by 49 other higher education associations, submitted comments in response to the Department of Labor (DOL) Notice of Proposed Rulemaking (NPRM) to update the Fair Labor Standards Act (FLSA) overtime regulations. In the NPRM, the DOL proposes to update the salary threshold for the “white collar” exemptions to the FLSA overtime pay requirements from its current level of $35,568 annually to $60,209 per year — a nearly 70% increase.* Additionally, the department proposes to automatically increase the salary level every three years.

    CUPA-HR’s comments highlight the concerns from institutions across the country and ask that the DOL consider four recommendations:

    1) The DOL Should Not Update the Salary Threshold at This Time

    The DOL most recently updated the minimum salary threshold in 2020. CUPA-HR welcomed updates at the time, given the minimum threshold had not been successfully updated since 2004 and the level proposed in 2019 was appropriate at the time. With the most recent update becoming effective in 2020, we believe it is too soon for the DOL to move forward with another update to the minimum salary threshold.

    2) The DOL Should Lower the Proposed Minimum Salary Threshold and Account for Room and Board

    If the DOL does choose to move forward with an increase to the threshold, we believe that the proposed minimum salary threshold is too high. Updating the salary level from $684 per week ($35,568 per year) to $1,158 per week ($60,209 per year) leads to a nearly 70% increase, which will result in a large number of employees being reclassified to nonexempt status. To avoid having to reclassify certain employees to nonexempt status, we ask that the DOL consider room and board as part of an employee’s total salary when considering if such employees meet the minimum salary threshold.

    3) The DOL Should Not Implement Automatic Updates to the Salary Threshold

    In the NPRM, the DOL proposes to implement automatic updates to the salary threshold that would occur every three years. CUPA-HR believes that the DOL does not have the authority to implement automatic updates under the FLSA and that automatic increases will negatively impact institutions’ budgets, their ability to provide merit-based increases, and employee morale.

    4) The DOL Should Extend the Effective Date of Any Final Rule Implementing a Higher Salary Threshold

    According to the NPRM, the DOL anticipates providing 60 days for compliance with a final rule once it is published by the agency. CUPA-HR believes 60 days is too short a timeframe to assess the impact, plan, and implement appropriate changes on campus. Instead, we ask for an effective date that is at least 180 days after any final rule is published.

    CUPA-HR’s president and chief executive officer, Andy Brantley, shared the following: “To say campuses are extremely concerned with the Department of Labor’s proposed rule increasing the minimum salary threshold to the FLSA overtime pay requirements by almost 70% would be an understatement. Employees in positions that clearly meet the three criteria to qualify as white-collar employees who are exempt from the federal overtime pay requirement will be forced into nonexempt positions.”

    In addition to submitting these comments, CUPA-HR also joined the Partnership to Protect Workplace Opportunity’s comment letter addressing concerns with the proposed rule. CUPA-HR will keep members apprised of any updates relating to this proposed rule and our advocacy efforts as the department moves toward finalizing these regulations.

    * The discrepancy between our figure of $60,209 and the DOL’s preamble figure of $55,068 arises from DOL’s own projections based on anticipated wage growth. The DOL’s proposed rule is rooted in 2022 data (yielding the $55,068 figure), but a footnote in the NPRM confirms that the salary threshold will definitely change by the time the final rule is issued to reflect the most recent data. Our comments, aiming to respond to the most probable salary threshold at the time a final rule is released, references the DOL’s projected figure for Q1 2024, which is $60,209. We do not believe DOL will be able to issue a final rule before Q1 2024, so we are incorporating this projected figure into our response to the NPRM. In essence, our goal is to provide members with a clearer picture of the likely salary figure when the final rule comes into play.



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  • Department of Labor Proposes New Overtime Rule – CUPA-HR

    Department of Labor Proposes New Overtime Rule – CUPA-HR

    On August 30, the Department of Labor (DOL) announced a new proposed update to the salary threshold for the “white collar” exemptions to the Fair Labor Standards Act’s (FLSA) overtime pay requirements.

    DOL proposes raising the minimum salary threshold from its current level of $35,568 annually to $55,068 — a nearly 55% increase. It also raises the salary level for the Highly Compensated Exemption (HCE) to $143,988 from its current level of $107,432 (a 34% increase). The proposal does not make any changes to the duties requirements. DOL does, however, propose automatically updating the threshold every three years by tying the threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region. For more information, DOL issued a FAQ document addressing the changes in the proposed rule.

    DOL first announced their intention to move forward with the proposal in the Fall 2021 Regulatory Agenda and set a target date for its release in April 2022. However, CUPA-HR, along with other higher education organizations and hundreds of concerned stakeholders, expressed concerns with the timing of the rulemaking and encouraged DOL to hold stakeholder meetings prior to releasing the anticipated overtime Notice of Proposed Rulemaking (NPRM). In a recent letter, CUPA-HR joined other associations in calling for the department to postpone or abandon the anticipated overtime rulemaking, citing concerns with supply chain disruptions, workforce shortages, inflation, and shifting workplace dynamics.

    The proposed rule was published in the Federal Register on September 8, allowing the public 60 days to submit comments. CUPA-HR plans to file an extension request with the agency. We will also continue evaluating the current proposal and work with members to prepare comments to submit on behalf of the higher education community. Furthermore, an extended session of the CUPA-HR Washington Update on September 21 will delve into the nuances of these proposed changes and their ramifications on campus.

    Register for the Upcoming Webinar

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  • Department of Labor Moves on Proposed Overtime Rule – CUPA-HR

    Department of Labor Moves on Proposed Overtime Rule – CUPA-HR

    by CUPA-HR | July 13, 2023

    Yesterday, the Department of Labor (DOL) sent its proposed rule on “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” to the White House Office of Information and Regulatory Affairs (OIRA) for review. This is a required initial step before the proposed overtime rule is published.

    OIRA, part of the president’s Office of Management and Budget (OMB), is required to review all proposed and final rules, as well as all regulatory actions, before implementation. While OIRA has 90 days to conduct its review, in most cases, the review takes 30 to 60 days. If this timetable holds true, DOL stands a reasonable chance of publishing a proposed rule sometime close to the August 2023 target date set forth in the Spring 2023 Regulatory Agenda.

    The proposed rule is not public during OIRA’s review, so at this time we do not have any specific details on what the proposal contains. However, OIRA takes meetings to hear from concerned parties about proposed rules under their review, and CUPA-HR will be requesting a meeting to reiterate concerns we have set forth in letters to DOL since the proposal appeared on the Fall 2021 Regulatory Agenda.

    We’ll be sure to keep CUPA-HR members updated on all the latest details regarding the proposed overtime rule and possible advocacy opportunities during the OIRA review process.

     



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  • Supreme Court: Highly Compensated Employee Entitled to Overtime Because Employer Did Not Pay on a Salary Basis – CUPA-HR

    Supreme Court: Highly Compensated Employee Entitled to Overtime Because Employer Did Not Pay on a Salary Basis – CUPA-HR

    by CUPA-HR | February 23, 2023

    On February 22, the U.S. Supreme Court issued its decision in Helix Energy Solutions, Inc. v. Hewitt, finding that an employee making over $200,000 per year was entitled to overtime pay under the Fair Labor Standards Act (FLSA) because he was not paid on a salary basis. The case is a reminder that exempt status depends not only on how much the employee is paid, but also on how they are paid. Employers may want to be particularly careful when providing exempt employees — including part-time exempt employees — with different weekly pay based on hours worked.

    Under U.S. Department of Labor (DOL) regulations, an employee must meet the following three requirements to be considered an executive, administrative or professional employee exempt from the FLSA’s overtime pay mandates: (1) perform duties consistent with those exempt categories as set forth by the DOL, (2) be paid a minimum salary (currently set at $684 per week), and (3) be paid on a salary basis. The employer in the case argued that the employee was exempt because he was paid $963 per day, therefore making at least the minimum salary of $684 per week, and he met the duties test for an executive.

    The court found, however, that the employee was not paid on a salary basis as set forth in Section 541.602 of DOL regulations and was therefore not exempt. Section 541.602 requires exempt employees to receive the full pre-determined salary for any week in which they perform any work without regard to the number of days or hours worked. Specifically, the court said the employee “did not get a salary (of $963 or any other amount) because his weekly take-home pay could be as little as $963 or as much as $13,482, depending on how many days he worked.” The court did say, however, that daily-rate workers could qualify as paid on a salary basis if the pay met the conditions set out in DOL regulations §541.604(b).

    In a dissenting opinion, Justice Brett Kavanaugh contended that the salary threshold and salary basis test — both of which DOL created through regulations — may not be consistent with the FLSA itself. Specifically, Kavanaugh said:

    “The Act focuses on whether the employee performs executive duties, not how much an employee is paid or how an employee is paid. So it is questionable whether the Department’s regulations — which look not only at an employee’s duties but also at how much an employee is paid and how an employee is paid — will survive if and when the regulations are challenged as inconsistent with the Act. It is especially dubious for the regulations to focus on how an employee is paid (for example, by salary, wage, commission, or bonus) to determine whether the employee is a bona fide executive. An executive employee’s duties (and perhaps his total compensation) may be relevant to assessing whether the employee is a bona fide executive. But I am hard pressed to understand why it would matter for assessing executive status whether an employee is paid by salary, wage, commission, bonus, or some combination thereof.”

    Since the employer in this case failed to raise the challenge to the regulations properly, the issue was not considered before the court.  As such, it remains unclear how many justices agree with Kavanaugh and whether the majority of the court would overturn the DOL’s salary basis and threshold tests.

    CUPA-HR continues to monitor all updates relating to the FLSA and its implementing regulations and will keep members apprised of significant news with respect to the overtime issue.



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